... Tulsa Sees Growth as Oil and Gas Production Surges

Tulsa Sees Growth as Oil and Gas Production Surges

Tulsa Sees Growth as Oil and Gas Production Surges

Throughout most of the 20th century, it was considered “Oil Capital of the World.”

A giant golden statue of a driller stands before the site of the now-defunct International Petroleum Exposition, which was once the premier event for the energy industry.

Tulsa Sees Growth as Oil and Gas Production Surges

Built in 1966 for the International Petroleum Expo, the Golden Driller became the face of Tulsa’s petroleum industry.

A section of downtown has been designated the Oil Capital Historic District and is listed in the National Register of Historic Places.

It all started when oil was discovered in 1901, in a place called Red Fork, in what was not yet the state of Oklahoma. Soon thereafter the frontier settlement of Tulsa became a boomtown, and the city became the center of the world for oil production.
Tulsa and its surrounding region experienced a series of booms throughout the first half of the 1900s. Although the city has relinquished the title of “Oil Capital of the World,” it remains home to a number of companies still active in the oil and gas industry. Those companies are primarily involved with manufacturing, construction and services related to the energy industry. Tulsa is also home to a number of midstream pipeline companies, such as ONEOK, Williams and others.

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The city’s roots in energy production run so deep that even its mayor is connected to the industry. Mayor Dewey Bartlett is a third generation oilman. His grandfather, D.A. Bartlett, started Keener Oil and Gas Co. in 1900, in Titusville, Pennsylvania. He named the company after a producing reservoir in southwestern Pennsylvania, northwestern West Virginia and southeastern Ohio.

D.A. Bartlett moved to Oklahoma in 1910 and became involved with oil and gas operations in Creek, Tulsa and Washington counties. Today, Mayor Bartlett is owner and president of the small, independent oil and gas exploration company.
During those early days, when Bartlett’s grandfather and others were flocking to Tulsa in droves, the city experienced significant growth, both in terms of population and culture.

“The oil boom brought people there,” Bartlett says. “It was where people who had money to invest in oil moved. There was an influx of educated people, and they brought culture and education to Tulsa.”

Before Houston Ruled

In 1900, the year before oil was discovered near Tulsa, population in the city was reported at 1,300. By the next census a decade later it had bloomed to more than 18,000. By 1970, before the oil embargoes, before the demise of the International Petroleum Exposition and before the “oil bust” in the 1980s, the population in Tulsa had risen to 331,638.

Except for 1940, every census taken between 1900 and 1970 reported more than 25 percent growth in Tulsa. The city grew the most between 1900 and 1930, when population expanded by more than 100 times. In that period, Tulsa experienced two oil booms, the first spanned 1901-1907 and the second 1915-1930.

The profits from the oil and gas work around Tulsa led to investment and philanthropy efforts in the city, and Mayor Bartlett says it still does. Back then, oil riches led to establishing a number of cultural institutions that are still a big part of life in Tulsa today. There are two major art museums, a world renowned ballet, a notable orchestra and one of the oldest operas in the United States.

“The cultural aspect of Tulsa sometimes is very surprising to people who come here for first time,” Bartlett says, “but that all started because of the oil and gas industry.”

Historic Tulsa, Oklahoma

One of Tulsa’s early oilfields, production in the Glen Pool area helped turn Tulsa from a frontier settlement into a metropolis.

In 1910 Tulsa had a grand total of 16 office buildings. Six years later it was 93. By 1920, 431 oil and gas companies existed in Tulsa. Although expansion halted between the Great Depression and World War II, development in what is now the Oil Capital Historic District continued after the war virtually unabated until the late 1960s.

During the Roaring Twenties, Tulsa’s growth led to a significant building phase that occurred amid the Art Deco period, Bartlett says. As oil money rolled in, prominent Tulsans built skyscrapers and other buildings that the Tulsa Preservation Commission website says resulted in one of the preeminent Art Deco collections in the United States.

The commission lists dozens of buildings that reflect the style, including the Oklahoma Natural Gas Co. building, which was built in 1928 and was one of the first examples of Art Deco architecture in the city.

Between 1920 and 1929, Tulsa’s downtown area saw 24 new buildings erected, and 20 of those are within the Oil Capital Historic District. By then, the city was headquarters to 1,500 oil-related companies. Tulsa was the heart of the Mid-Continent oilfield, which produced two-thirds of the U.S. oil supply. Its refineries produced more gasoline than any other location
in the United States and supplied coast-to-coast pipelines. That’s why Tulsa was known as the “Oil Capital of the World.”

Tulsa’s Oil Capital Historic District

Tulsa’s Oil Capital Historic District stands as a monument to the oil and gas industry and its contributions to the city’s growth in the 1900s.

Booming to Busted

The oil and gas industry was so strong in Tulsa that they had to build a statue for it. You saw it on the cover of this magazine. The Golden Driller is 76 ft tall and 43,500 lbs. The statue depicts an oilfield worker whose right hand rests on an actual oil derrick that came from a depleted oilfield in Seminole, Oklahoma. It is the largest free-standing statue in the world, and the fourth tallest statue in the United States.

The statue was originally built in 1953 by the Mid-Continent Supply Co. for the International Petroleum Exposition. It was torn down and then temporarily erected again for the 1959 show. Because it was so popular, the company donated the statue to the Tulsa County Fairgrounds Trust Authority, which had it permanently installed in front of the newly built Tulsa Expo Center for the 1966 exposition, which was the biggest in the show’s history.

In its heyday, the International Petroleum Exposition was “THE” oil and gas show, according to Terry Flynn, business development manager at Tulsa Rig Iron, which has been headquartered in the city since it began in 1986. Flynn has spent most of his career working in sales and marketing for energy equipment manufacturing companies in the Tulsa area. He is involved in promoting the Tulsa energy industry across North America and active in many industry associations, including his membership on the Pipe Liners Club of Tulsa board of directors.

Prominent oilman and entrepreneur Bill Skelly started the International Petroleum Exposition in 1923. Over the years, attendance grew so large that it spurred Tulsa to pass a $3.5 million bond issue to build the Tulsa Expo Center. At the time, the facility was the world’s largest building under a single room, Flynn says. However, the 1970s were unkind to the event.

Foreign oil producers were seizing greater influence over the global market, and U.S. production was moving offshore. Oil prices collapsed in the late 1970s, and after only 20,000 attendees came to the 1979 International Petroleum Exposition, it was permanently cancelled. The 1980s continued the decline for Tulsa’s oil and gas industry.

In the early 1980s, overproduction of oil overseas and a national recession led to a 50 percent decline in oil prices. The result was a “bust” in the market between 1982 and 1987, and the oil industry continued to consolidate and eliminate jobs through the 1990s. As the Gulf of Mexico became the leading source of U.S. oil reserves, Houston took on the mantle of “Oil Capital.” Today, the Oil Capital Historic District serves as a monument to the industry that fueled the Tulsa’s growth during the 20th century. But the industry hasn’t left Tulsa completely.

“Following the oil bust in the early 1980s, several big players in the industry relocated to Houston,” Flynn says, “but there are a tremendous amount of companies that stayed right here and have proudly thrived and grown over the years.”

Resurgence Comes

Although Houston has become the focal point for the U.S. oil and gas industry, the revitalization of the industry in Tulsa has resurrected the city as a focal point for midstream pipeline companies, according to Bill Davis, business development manager at Enduro Pipeline Services Inc., which started in Tulsa in 1988.

Prior to being called Enduro, however, company owner Dwane Laymon in 1983 started Electronic Pipeline Services in his garage, in the Tulsa suburb of Sand Springs, Oklahoma. Davis joined Enduro in 2007, but spent 12 years before that as a product representative for the company. He has spent his whole career in the energy industry, starting out in Houston in 1970. He moved to Tulsa in 1980 and lived there for 15 years before relocating to Atlanta. Davis says shale oil and gas development is driving Tulsa’s resurgence.

“The Mississippi Lime shale play on the Kansas-Oklahoma border and the Cline and Wolfcamp shales have led to the Permian Basin rebirth, which is a 50-year-old oilfield,” Davis says. “The shale rebirth has extended the area another 20-30 years.”

And unlike other shale-rich regions, such as North Dakota, the Mid-Continent doesn’t lack for infrastructure to handle the oil and gas being produced in the region, Davis says. Because North Dakota doesn’t have enough pipelines and storage facilities, companies have had to flare excess gas. In Tulsa, shale development has benefited the energy companies as well as other businesses.

“The job market in Tulsa is extremely healthy due to the rebirth of the oil and gas industry in the United States, due to the shale plays,” Davis says. “It’s a trend documented by research papers performed by a number of organizations. All Tulsa-based legacy companies are benefitting across board. The economic momentum can easily go for the next 10 years.”

According to the U.S. Bureau of Labor Statistics, the unemployment rate in Tulsa has been less than 5 percent since April, whereas the most recent national unemployment rate was 6.1 percent.

“There’s no question about it that it’s because of the oil and gas industry,” Bartlett says. “The industry supports hundreds of thousands of people. [The unemployment rate] is directly related to the industry’s success.”

A June 5 article in the The Oklahoman, the state’s largest newspaper, reported that Oklahoma’s oil production could jump to the third biggest in the United States, behind only Texas and North Dakota. Continental Resources Inc. CEO Harold Hamm told the paper that tax incentives meant to encourage horizontal drilling have done their job, as Oklahoma’s oil production is steadily increasing.

Oklahoma produced 388,000 barrels of oil per day in March, marking its highest output in 25 years, according to the U.S. Energy Information Administration (EIA). That was an increase of 17 percent over March of last year, 49 percent over March 2012 and 80 percent over March 2010.

Excluding federal offshore areas, the EIA ranked Oklahoma fifth in crude oil production in the United States in 2013. However, Continental Resources officials predict the state could leapfrog California and Alaska in the next year or so, according to The Oklahoman article.

The EIA also indicates that Oklahoma is one of the top natural gas-producing states in the nation, accounting for 7.1 percent of U.S. gross production and 8.4 percent of marketed production in 2013.

The oil and gas industry is the No. 1 industry in Tulsa, Bartlett says. The industry collectively represents the highest payroll of any other in the city, which remains second only to Houston in the number of energy related jobs in the country. Alternative energy manufacturing is also big in the city, as well as aeronautics manufacturing.

Historic downtown Tulsa is still home to many industry players, says Flynn, who credits the mayor with retaining and attracting business in the oil and gas industry to Tulsa.

“Mayor Bartlett was instrumental in launching the Second Century Energy Initiative, which is our city’s commitment to being at the leading edge of energy policy and research, leadership and development,” he says. “I am certain that I can speak on behalf of all other energy related companies in the Tulsa area that business is booming. The manufacturing and services segment of the energy industry in Tulsa is huge.”

Even though the old International Petroleum Exposition is long gone, a new energy trade show sprouted up in the shadows of the Golden Driller. In 2009, the Tulsa Pipeline Expo began using the old Expo Center at the fairgrounds, hosting an event with the mission to stimulate economic growth in Oklahoma by showcasing pipeline and energy businesses. This year,
the show unveiled a new name and a new location.

Now called the Pipeline and Energy Expo, the show has expanded to include all forms of energy. This year’s event is Aug. 25-27 and has been relocated to the Cox Business Center closer to downtown Tulsa. Although the Golden Driller won’t watch over the proceedings, the event is now just a stone’s throw from the Oil Capital Historic District, with the old Oklahoma Natural Gas Co. building a half mile away. The event’s success is just another reminder that the oil and gas industry is back on the rise in the city.

Like most industrial cities, Tulsa has had its setbacks, but its rich legacy in the oil and gas industry has allowed it to stay strong.

Bradley Kramer is managing editor of North American Oil & Gas Pipelines. Contact him by email at bkramer@benjaminmedia.com.

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